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May 02, 2012
Brattle Principal Coleman Bazelon Featured in Forbes Article on the Value and Allocation of LightSquared Spectrum

Brattle principal Coleman Bazelon was quoted in a recent Forbes article discussing the best use and possible value of the radio spectrum of LightSquared, a wholesale network capacity provider that recently lost its conditional waiver for use of the spectrum from the FCC.

LightSquared recently clashed with the GPS industry, which feared that LightSquared’s network would interfere with navigational devices. Phil Falcone, who recently gave up control of LightSquared, claimed that the fault lay with the GPS industry for failing to install filters to protect devices against activity in neighboring frequencies. In the article, “What’s Falcone’s $3 Billion Gamble on LightSquared Worth Now?” Dr. Bazelon discusses what can be done with the 46 megaherz of spectrum that is now available, and how much it is worth.

Dr. Bazelon argues that the value of LightSquared’s spectrum “depends entirely upon your view of what the GPS community can do” and that the problems with GPS are fixable, but may take more time than LightSquared’s creditors are willing to invest. Dr. Bazelon estimates that the spectrum, put to its best and highest use, would be worth at least $12 billion. Further, Dr. Bazelon discusses the options available for using the spectrum including reclamation by the FCC, as well as selling to a long-term holder, like AT&T or Verizon.

Whatever LightSquared’s investors decide to do with the spectrum, Dr. Bazelon argues that the FCC will continue to try and find a higher economic value for the spectrum. “The amount of money needed to convince TV broadcasters to leave their 120 megaherz of spectrum is probably $15-$20 billion, but it’s worth at least two times that to the cellular industry,” Dr. Bazelon said. “As long as cost of making spectrum available is less than the value to wireless companies, you should be making it available to them.”

To read the article in its entirety, please visit the Forbes website.